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We love data at Nous Global Markets and this is why we pay for our user’s predictions on the markets. We think this data is valuable, uncorrelated and unique.

One market we’ve been keeping an eye on this week is the GBPUSD (pound dollar or ‘cable’) pair. There are two events this week which will, likely, get market participants involved:

The UK Parliamentary Elections are taking place today in the UK. Any uncertainty around the outcome of the election or a surprise outcome will impact the pound.

Non-Farm Payroll figures are released in the United States on Friday and this may impact all USD pairs including GBPUSD.

For now, this market is trading within the range set by yesterday’s price action; with resistance at 1.5290 and support at around 1.5150. So, the buyers and the sellers are in broad agreement with one another and price is moving sideways. The events of the next few days and any uncertainty around the outcome of the election will tip the balance one way or the other, we will get market flow and GBPUSD will likely move out of this range.. Fast…

So, where are our users positioning themselves coming into the end of this week? The picture gives an indication of the opinion of the crowd in SparkProfit for this week on GBPUSD.

What the crowd thinks of GBPUSD

We have observed buying pressure from the start of the week in SparkProfit on GBPUSD. The green line indicates the amount of bulls in the market and the red line shows the bears. The white line is a probabilistic signal based on the total long/short orders and compares the long and short orders in the game to randomly generated trades. That’s a mouthful! The short story is that this line gives the long or short bias of our players compared to trades from a room full of monkeys trading randomly.

The buy flow increased from the start of the week and was a leading indicator of the breakout to the upside in this case. The crowd is still net long but buy orders have not been increasing much over the last 24 hours as traders adopt a wait and see approach.

Its hard to know which way this is going to go but the chart below presents some levels to monitor which may give some opportunities to trade from on bounces or, if they break, retests.

Levels to watch for bounces or retests.

No Risk With SparkProfit

Which ever way you think GBPUSD is going to go, you can play GBPUSD risk free with SparkProfit.

The investment is an important milestone and a validation of Nous’s business model, which to date has been entirely self-funded. Nous’s goal is to increase its Spark Profit user base to 250,000 users in the next six months.

Nous is using the funds raised to add new markets and social features to the Spark Profit application. All of the funding has been raised from private investors, predominantly senior finance and technology professionals at global investment banks.

Justin Short, CEO of Nous, says:

“This investment is fantastic news for Nous. All of our investors will contribute not just capital, but also their considerable industry experience. We now have even stronger connections to the forward thinking hedge-funds that can make the most of our unique data feeds.”

Nous Global Markets was founded in September 2012 by Justin Short and four other former high flying Merrill Lynch traders and technologists. Originally based in Tokyo it has since relocated to London.

In January 2014, Short and his colleagues launched their free-to-play virtual trading game – ‘Spark Profit’ – which enables players to predict currency and liquid instrument movements in return for cash prizes. Spark Profit has already 84,000 users in 200 separate countries, with several players expected to earn over a thousand dollars in annualized prize money through their accurate predictions.

Nous collects and processes the price prediction data, weighing in at 250,000 predictions per week, using its own proprietary software, and has created data feeds which it is marketing to hedge funds, banks and other financial institutions. It is in discussion with potential clients about pilot schemes to assess how Nous’ data can enhance their internal systems and strategies.

A key strength of Nous’s crowdsourced data is that it is generated without interpreting natural language responses, unlike some firms that analyze text such as comments on Twitter and Facebook to monitor consumer sentiment. Nous describes its product as “perfectly quantified intuition”.

The greater the player base, the higher the value of the data generated from its data feeds. The feeds give financial institutions the ability to understand – and even accurately anticipate – market price changes at multiple time scales, including much shorter ones than are served by traditional analysts.

Nous was founded in 2012 by Justin Short and four other former high flying Merrill Lynch traders and technologists, who saw an opportunity for professionals to better understand and predict financial markets, and to empower people around the world to discover their trading talents. It launched Spark Profit, the free-to-play virtual trading game, in January 2014.

“In rising financial markets, the world is forever new. The bull or optimist has no eyes for past or present, but only for the future, where streams of revenue play in his imagination” – James Buchan

We just can’t help ourselves. We open a chart, take a look at where price is now and, regardless hit that BUY button. It would seem most of us are overly optimistic when it comes to estimating the markets (and most things in life). This optimism is reflected in the trading behaviours of the majority of the crowd in Spark Profit – we tend to be bulls!

Being bullish, or bearish, are terms used to describe the actions and outlook of a trader or a market. A bull market describes a market which is rising on a wave of optimism. A bear market declines on selling pressure as people rush to the exit to offload their investments.

Many of us are naturally bullish on the markets.

The bulls

The glass is definitely half full with this bunch. Everything is great, the economy is improving and the only way is up! What could possible go wrong? The image of the bull comes from the way the bull attacks – a bull will thrust up with its horns in the air – this action being the metaphor for a rising market.

The Bears

For a bear, the only way is down and fast. A bear’s glass is definitely half empty. Bears are no fun at parties – at least not to Bulls. The image of the bear comes from the way the bear behaves – a bear moves slowly and attacks by swiping with its paw in a downward direction.

The Problem.

The problem for you, as a trader, is that you want to be able to assess the markets without your own internal views skewing your trade telling you to go long when you should be short.

Whether you are a bull, or a bear, almost all traders have a natural inclination to one extreme or the other. Even some of the most experienced traders suffer from a permanent Bullish view (or an aversion to sell). Mark Weinstein said in his interview for Market Wizards that he “never went short. I felt it was un-American”. Mark went on to say “I realized that the business I was in was the height of capitalism, and it really made no difference what side of the market you were on”

So, what to do?

Flip it! That’s right, turn that chart upside down – get a new perspective. Now, before you start turning your mobile device around in what will sure to be an endless cycle of frustration – just click the new icon on the upper left corner the next time you open a chart in Spark Profit. It will flip the chart for you – giving you a new perspective to base your decisions on. How do you feel about your chosen market now? Still feeling bullish?

The S and P index flipped. How do you feel about it now?

Regardless of whether you are a bull or a bear, don’t get into a trade until you are ready. Flip that chart and get a different perspective.

“There is only one side of the market and it is not the bull side or the bear side, but the right side” – Jesse Livermore

Hi! I wanted to explain why we built Spark Profit and why it’s so special. So let me start with a bit of personal history.

Before I and four very smart people quit our jobs to found Nous together, I was working at a large Investment Bank as Regional Head of Electronic Trading Strategy. I’d been working in that industry for 14 years and judging by my performance reports, I was pretty good at it. So why quit?

One of the reasons was that I saw an unbelievably huge opportunity – not just for me but for literally millions of people. Working in the financial markets, I knew first-hand how important technology and quantitative skills are to trading profitably. After all, I commissioned and built strategies that helped our customers shave valuable basis points from their costs, improving their efficiency and ultimately benefitting their customers, the public.

But I also saw that human intuition was still very much alive. Certain colleagues at all the financial firms I have worked at: UBS; Deutsche Bank; and Merrill Lynch / Bank of America, were fantastically good at understanding the rhythm of the market. They could sense when the tide was about to turn, and make a lot of money by being one of the first to jump in and by riding the movement all the way. They naturally understood the psychology of the market.

I have a lot of respect for these people.

But one thing bothered me. They were to some degree all from a common mould. They were all university graduates, mostly male, all speaking English. They were comfortable wearing a suit and living in the city. Of course, they’d all made it through interviews with similarly demanding firms: they had to fit a mould. But was all that really necessary, in order to be a great trader?

I didn’t think so. Not at all.

Which begs the question, how many other people never got the chance to find their calling, just because they failed to fit the mould?

When I had my Eureka! moment, I found a way to connect everyone in the world to the markets and give them the right tools and incentive to win, without requiring anything from them in return. That is Spark Profit. Of course, I was happy that the system would be profitable for us, the creators. But I was ecstatic that at the same time it would be such a tremendous force for equality. Unlike Investment Banks, Spark Profit doesn’t care where you are or what you look like. Spark Profit doesn’t even mind if you have another job!

We like to say that Nous is an “opportunity factory” – because every day, a thousand more people experience that opportunity. Which is why when we started out, back in 2012, we created the Nous company vision:

THE NOUS VISION:

A world in which millions of people are living richer, happier lives thanks to their talents and our assistance.

Nous was the first company in the world to truly make trading free — and then even cheaper! Only Spark Profit offers you, and everyone in the world, a chance to test and refine your trading talents, while guaranteeing a skill-based payout that requires no payment and no deposit. We’re incredibly proud that we’ve never taken a single penny from any of our 80,000 players and yet we’ve already been able to award $60,000 in prizes.

We hope you like what we’re doing too. If you do, please spread the word (and maybe earn yourself a little extra income at the same time!)

Well, just like Google has figured out how to earn money from your searches, we have our own neat way of making a profit. People really have earned hundreds of dollars playing Spark Profit for just a few minutes a week, and it really is free. Here’s how it works.

The simple explanation

As you’d expect, there is a wide range of ability in the hundreds of thousands of people who’ve tried Spark Profit already. In fact, some are extremely talented. (And true to our hypothesis, previous experience doesn’t seem to matter at all. You don’t know if you’ll be good until you try!)

Now suppose we take all those skilled players and simply built a machine to trade (just copy) all their predictions — using our own money. This should make a nice revenue for us even though no-one has paid us a single penny. After we take off the expense of building and running the app we should still have enough profit left over to share it between the players and ourselves. Problem solved!

It’s all in the details

In reality it’s not quite that simple – we don’t necessarily copy any individual player directly and we have ways to glean information from even the worst players. We call what we do “crowd-sourcedalpha“. But the essence of it is fairly close to finding the good players and copying them.

As a business model, it seems so obvious once you understand it but, as far as we know, no-one’s thought to do it before (or possibly, had the right combination of skills).

There has to be a catch!

One of the things we’re most proud of about our unique system is that you – the player – never risk anything. You don’t pay to join and don’t pay to play. You literally have nothing to lose. Really that’s because we take all the risk. And that single fact is the one and only catch to our amazing business model: we actually need to be very good at what we do, to be successful doing it.

But even if we were to ever get it wrong and lose our money, you’d never have lost a penny because you’ll never have paid a penny. Isn’t this better for you than other trading sites where you pay and you take on all the risk? We think so.